Federal government, Governors, Private sector clash over minimum wage increase

The Federal Government’s proposal to raise the minimum wage above N60,000 has met significant resistance from state governors and the private sector, who argue that such an increase is financially unsustainable.

According to reports, the Federal Government is prepared to accept N65,000 as the new minimum wage, but governors and the organised private sector insist that anything above N57,000 is impractical.

They argue that paying a higher wage would leave little to no funds for developmental projects, as a substantial portion of resources would be directed towards wages.

The ongoing negotiations between the Federal Government and Organised Labour, which includes the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), have yet to reach a consensus. Organised Labour has rejected the government’s offer of N60,000, reducing their initial demand from N497,000 to N494,000.

The governors’ primary concern is that accepting a minimum wage above N57,000 would significantly strain state budgets, hindering their ability to fund essential developmental projects.

This stalemate has resulted in a nationwide strike called by the unions, protesting the government’s failure to approve a new minimum wage and reverse the hike in electricity tariffs.

Despite the strike, which disrupted economic activities, the Federal Government remains committed to increasing the minimum wage. Following a meeting with Organised Labour, the government reiterated its intention to establish a minimum wage higher than N60,000, with daily meetings scheduled to finalize the agreement.

However, the Nigeria Governors’ Forum (NGF) has expressed doubts about the sustainability of a N60,000 minimum wage. In a public statement, the NGF highlighted that many states would struggle to allocate sufficient funds for salaries without compromising on developmental projects.

They urged all parties to consider the broader socioeconomic implications and strive for a realistic and sustainable agreement.

As negotiations continue, the Tripartite Committee, including representatives from the government, private sector, and labour unions, is working towards a consensus.

Imo State Governor Hope Uzodinma, a member of the committee, indicated that they are nearing an agreement, which will be finalized in upcoming plenary sessions.

Meanwhile, the NLC has criticized the Secretary to the Government of the Federation, George Akume, for labelling the strike as a “treasonable felony and economic sabotage.”

The NLC argued that the real economic saboteurs are those mismanaging public resources and engaging in corrupt practices.

The outcome of these negotiations will be crucial in determining the new minimum wage, balancing the demands of workers with the financial realities faced by states and the private sector.